Court documents show Flair Airlines owes Ottawa $67.2 million in unpaid taxes, prompting the Canada Revenue Agency (CRA) to obtain an order to seize and sell the airline’s assets.
The amount relates to import duties on the 20 Boeing 737 Max planes that make up the budget airline’s fleet, CEO Stephen Jones said.
He says the Federal Court order obtained by the tax agency in November has no impact on the carrier’s operations, which have grown over the past year and intensified competition with rival airlines.
“We have agreed to a payment plan with the CRA to pay these import duties, and we are up to date with that plan,” he responded by email, adding that the terms of the agreement are confidential.
The Canada Revenue Agency said for its part that it cannot comment on specific cases for confidentiality reasons, but that it can seize income or assets as a last resort if suitable payment arrangements with a business could not be concluded.
The order follows the repossession of four Flair Airlines planes last March after the leasing manager, Airborne Capital, claimed the company regularly missed payments over the previous five months.
In response, Flair launched a $50 million lawsuit against Airborne Capital and three other leasing companies, arguing that the four companies’ continued demands for payment were “baseless.”
Flair has touted its accomplishments in recent months, claiming the nation’s best flight completion rate of 98 percent and an on-time rate of 69 percent, which is low globally but strong compared to its Canadian competitors.
The company mentions having transported 296,000 passengers in December and 4.5 million in 2023, which represents significant gains compared to the previous year.
The ultra-low-cost carrier, however, faces increased competition from WestJet and close rivals Lynx Air and Porter Airlines, both of which are growing rapidly.
By placing more emphasis on sun destinations this winter, Flair finds itself in direct competition with other airlines which continue to do the same, notably Sunwing and Air Transat.